Published on 6/2/2016 in the Prospect News High Yield Daily.
New Issue: Yum! Brands prices downsized $2.1 billion of notes in two tranches
By Paul A. Harris
Portland, Ore., June 2 – Yum! Brands Inc. priced a downsized $2.1 billion two-part offering of senior notes (B1/BB) on Thursday, according to a syndicate source.
The deal included $1.05 billion of eight-year notes, which priced at par to yield 5%. The yield printed on top of yield talk but at the wide end of the 4¾% to 5% initial guidance, market sources said.
Yum! also priced $1.05 billion of 10-year notes at par to yield 5¼%. The yield printed on top of yield talk as well as initial guidance, which had the 10-year notes pricing 25 basis points behind the eight-year notes.
The deal, which was downsized from $2.3 billion on Thursday morning, was oversubscribed, with $5.25 billion of orders evenly split between both tranches, an investor said.
The company raised the $200 million downsize amount by upsizing its concurrent term loan.
Goldman Sachs & Co. was the left bookrunner. J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners.
The Louisville, Ky.-based fast food company plans to use the proceeds to help finance a cash distribution to its parent, to be used to fund share repurchases and/or a special dividend, also to repay its existing credit facility and for general corporate purposes.
Yum! operates KFC, Pizza Hut and Taco Bell.
| Issuers: | KFC Holding Co., Pizza Hut Holdings, LLC, Taco Bell of America, LLC (Yum! Brands, Inc.)
|
| Amount: | $2.1 billion, decreased from $2.3 billion
|
| Securities: | Senior notes
|
| Left bookrunner: | Goldman Sachs & Co.
|
| Joint bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities LLC, Morgan Stanley & Co. LLC
|
| Co-managers: | BofA Merrill Lynch, Fifth Third, MUFG, Barclays, ICBC, Rabobank, Scotia Capital, Williams Capital Group
|
| Trade date: | June 2
|
| Settlement date: | June 16
|
| Ratings: | Moody's: B1
|
| S&P: BB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Eight-year notes
|
| Amount: | $1.05 billion
|
| Maturity: | June 1, 2024
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Spread: | 331 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until June 1, 2019, then callable at 103.75
|
| Price talk: | 5% area
|
|
|
| 10-year notes
|
| Amount: | $1.05 billion
|
| Maturity: | June 1, 2026
|
| Coupon: | 5¼%
|
| Price: | Par
|
| Yield: | 5¼%
|
| Spread: | 345 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until June 1, 2021, then callable at 102.625
|
| Price talk: | 5¼% area
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
